Tag Archives: Bengaluru Infrastructure

What makes Bangalore best investment destination?

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: What has made Bangalore real estate market so very different? Has Bangalore been just blessed with climatic conditions, thriving economy of the region and talent pool or the developers in the city have been conscious to learn from the mistakes of other markets?

Bangalore, Bengaluru, Bangalore real estate, Bangalore property market launches, Infrastructure in Bengaluru, Investment in Bangalore infrastructure, India real estate news, Indian realty news, Real estate news India, Indiaproperty market, NRIs in Bangalore, Track2RealtyBangalore real estate market has been the brand differentiator of Indian property landscape. Be it transparency, fair trade practices, construction quality, project delivery timelines or consumer satisfaction; the developers in the city have a much better track record.

What has made Bangalore real estate market so very different? Has Bangalore been just blessed with climatic conditions, thriving economy of the region and talent pool or the developers in the city have been conscious to learn from the mistakes of other markets?

In order to understand Bangalore it is imperative to assess the demand & supply equilibrium in the city, balance between commercial spaces and housing stocks, price point & median affordability and last, but not the least, the fair competition among the city-based developers.

Trivita Roy, Associate Director-Research & REIS, Jones Lang LaSalle India maintains there are multiple of factors to make Bangalore best investment destination. According to her, Bangalore is a stable market. It may not give the kind of returns that investors may get in other speculative markets, but it gives them the confidence that it is a stable market. So, Bangalore makes a safe market to invest. Second is the kind of quality, transparency and professionalism that a developer shows here is comparatively best in the country.

“A lot of developers here are listed companies. Also, even if they are not listed at least they have the processes in place that gives a confidence to the investors that it is a process-oriented market. And then the transparency and information availability in Bangalore is far more stronger compared to other markets of India,” says Roy.

Ashish Puravankara, Managing Director, Puravankara Projects points out that the developers in Bangalore have inherited a market where the demand is so high that they are not competing on demand. It is better to support each other on the issues that are affecting the industry. There is a huge demand in Bangalore and it is probably the only city in the world where the population has doubled in the last once decade. 

“Most of the investment in Bangalore is for end use and it is a long-term investment; there is no speculative investment in Bangalore for capital appreciation. Just look at the demand of office spaces; it is the highest in Bangalore. The most important factor here is the cost of housing and if you compare the same quality of apartments in other cities you will find that Bangalore housing market is really value for money. What we are selling at 6,000 rupees per sq feet, you won’t find that at less than 17,000 to 18,000 thousand rupees in other metro cities,” says Puravankara.

J C Sharma, Vice Chairman & Managing Director, Sobha Limited adds that the overall culture of Bangalore as a city is very different. The way IT industry flourished here, the expectations of the customers were very different. The developers in this market just raised their bar to meet those expectations. 

“The IT professionals wanted that kind of professionalism and transparency that they were providing to their customers. So, there has been healthy competition among the developers; they have been competing to provide quality projects. Professionalism in Bangalore market has been the best,” says Sharma. 

What is also keeping the Bangalore property market realistic is that most of the housing stock in the city is below rupees 5000 per sq feet that is  quite reasonably priced. The analysts fear that the moment price point goes to Rs. 7,000 or 8,000 per sq feet then that would lead to the saturation point. Of course, some of the secondary locations are reaching up to that price point.

Moreover, the new locations in North part of South-East part still have the potential to grow. Bangalore has been growing from all sides. In 2002 everyone thought Whitefield is not a good location to invest but those who invested are today enjoying. The way the commercial spaces are being added and the projected export of IT by 2020 worth 200 billion dollars from India in which the share of Bangalore is expected to be 40 per cent. So, when 2 million people will be catering to IT only, even a layman understanding of real estate would say that the growth has just begun.

By: Ravi Sinha

Can Bengaluru’s infrastructure support vast real estate development?

Posted on by Track2Realty

Bottom Line: Faster implementation and collective effort is the key to success in Bengaluru’s infrastructure supporting real estate development, says a Colliers Research. 

Bangalore, Bengaluru, Bangalore real estate, Bangalore property market launches, Infrastructure in Bengaluru, Investment in Bangalore infrastructure, India real estate news, Indian realty news, Real estate news India, Indiaproperty market, NRIs in Bangalore, Track2Realty Bengaluru absorbs about 13-14 million sq ft of commercial office space every year, which is approximately one third of the total space leased in India. As per Colliers Research, the trend is likely to continue in the coming years.

The data analysis reveals that about 26 million sq ft of Grade A office buildings are under various stages of construction in the city which will completed by 2020. Most of this upcoming supply is concentrated in Outer Ring Road (ORR), which is a major commercial hub in Bengaluru.

“As on today, within ORR and Whitefield, the commercial office space stock accounts for approximately 78% of Grade A stock in Bengaluru. With infrastructure projects like the ORR metro line, and planned road improvement projects in and around these areas; the market is likely to remain bullish with respect to overall office space absorption in next 2-3 years, driven by IT-ITeS, followed by Engineering & Manufacturing and BFSI sectors. However, with more office supply coming in these markets, the pressure on infrastructure and support sectors is to increase multi-fold,” says Ritesh Sachdev, Senior Executive Director, Occupier Services, Colliers International India.

Bengaluru being a host to the largest share of technology start-ups (26%) in India, is the testing ground for co-working spaces and has always invited new occupiers, such as Capiot, InnerChef, Knowlarity, Monkey Box, Artifact Design, and many others. Moreover, the residential market is also developing to support the vast commercial development.

The story is good as far as the real estate development of the city is concerned, however, the unwelcome news is that the city’s infrastructure is unable to keep pace with the vast real estate development.

Bengaluru has seen an increase of 47% in population during the last decade (2001-2011) and the vehicle population growth rate is even higher than the population growth rate. The state government has started various initiatives and is going in the right direction to solve the infrastructure issues; Namma Metro being one of the initiatives. Phase 1 of the project connecting Nagasandra to Puttenahalli (Green line i.e North-South) and Mysore Road to Bayapanahalli (Purple line i.e East- West) corridors have been completed. Phase 2A, connecting Mysore Road to Challegatta near Kengeri and Yelachenahalli to Anjanapura is set to be completed by December 2018. This will push the demand in micromarkets such as Mysore Road and Bannerghatta Road.

Further extension of Phase 2 includes stretch between Silk Board and K.R Puram which is set to be completed by 2020. This will further boost demand in ORR accounting for 75% of the total leasing activity in Q3 2017.

Construction of underpass and widening of flyover along ORR at Hebbal Junction will improve commute time within the city’s major employment hubs. The National Highway Authority has also notified land for widening of NH 209 (948) till Kanakapura. With good accessibility to other parts of the city, these micromarkets are expected to improve further.

Although the government has started taking initiatives, the pace of development is slow. In our opinion, the government should also look at making the city sustainable to natural calamities. The time and again flooding of the city, brings the city to its knees. Along with the introduction of new infrastructure projects, the government should also focus on retrofitting the existing infrastructure.

According to Colliers Research following initiatives can be undertaken at three levels: 

One, at the citizen’s level, where they are imparted civic sense to follow the set rules of transportation like following the signals, crossing at footpaths, etc. This will ease the flow of traffic to a certain extent. 

The second initiative should be in identifying and implementing key infrastructure projects at a faster pace to improve the quality of living, to make Bengaluru a world class city. We believe that occupiers, investors along with the developers should make an effort to pressurise the government for the same. 

Bengaluru requires a comprehensive integrated sustainable public transport system like London and Singapore. Widening the road itself might not be the optimum solution for the problem. Efforts by all involved stakeholders, from citizens to governing bodies should work towards achieving a common goal, that is making Bengaluru uphold its name of Silicon Valley. 

Colliers Research says the infrastructure planned along commercial hubs such as ORR is likely to provide impetus to the real estate sector in ORR and nearby micromarkets, such as K.R. Puram and Hebbal. However, development of office assets without timely completion of infrastructure will leave the city in a chaotic state and may impact the office market adversely.